LCDs And Plasma Displays: The Bigger, The Better

Thanks to falling prices, technical advances and a growing interest in networked digital-signage systems, sales of large LCD and plasma displays are heating up. The result? The unleashing of pent-up demand for both types of large displays. In response, vendors, including LG and NEC, are working more closely with solution providers to get them up to speed and out to market.

"Digital signage is a collaborative experience, and yet until now there hasn't been an efficient and effective way for integrators and end users to find providers who really understand digital signage and can deliver results," says Brad Gleeson, president and COO of Poulsbo, Wash.-based ActiveLight, a nationwide distributor specializing in advanced display products.

Annual sales of large LCDs (30-plus inches) and plasmas will top $4.6 billion in 2010, up from $2.5 billion last year, according to market research firm iSuppli. More than 90 percent of 2010 sales will be in digital signage, indoor entertainment venues, transportation hubs and conference/training rooms. Education and niche markets, such as medical imaging and command/control rooms, will account for most of the remainder.

"LCDs have gotten to economies of scale in terms of production," says Mark Pickard, senior product manager for Samsung Electronics America's professional audio/video products. "Prices of large displays have fallen by half in the past two years."

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"I can get a 40-inch plasma for about $1,500 right now, or an LCD for twice that," adds Bryan Carmady, president of digital signage integrator Digital Media Assets in Lake Worth, Fla. The best deals are in the zone where LCD and plasma compete, he says, with LCDs dominating below 37 inches and plasmas reigning above 46 inches (the current maximum size of LCD screens).

LCD technology is challenging plasma in critical-performance factors as well as size. Film-quality video requires a response time of 16 milliseconds or less to eliminate flicker. Several vendors' large displays now match the 16-ms mark, while Samsung and NEC set the pace at 8 ms. Most vendors now offer contrast ratios of 500-1 to 800-1, ample for most commercial uses.

But plasma retains its edge in very high-performance video. A 10,000-1 contrast ratio may seem like overkill, but Neal Goldsmith, Sony's product manager for large displays, says medical-imaging and film-production specialists need all the color depth that Sony's FWD-42PV1 42-inch plasma delivers. Samsung's latest plasmas also offer 10,000-1 contrast, while other vendors fall between the range of 1,000-1 and 3,000-1 for now.

Plasma also has made progress in power consumption and panel life, two of its biggest vulnerabilities vis-a-vis LCD. "Our new 42-inch plasma [the FWD-42PV1] draws 260 watts compared to 400 watts of older models," Pickard says. "That translates into longer service life and lower cost of ownership." Plasma and LCD displays now claim typical service lives of 60,000 hours.

Plasma remains the choice for pure video, while LCDs are better suited for mixed video/static content. The latter category is where the most sales growth is expected, according to iSuppli. LCD sales will grow from last year's $442 million to $1.7 billion in 2010, while plasma sales will fluctuate around $2 billion per year.

Markets To Target

Just where are the opportunities for VARs? In the corporate world, large plasma displays are penetrating conference rooms where videoconferencing is catching on. Corporate training facilities use plasmas and LCDs for group presentations. Companywide employee communications, in fact, proves a fertile area for advanced displays integrator Webpavement of Alpharetta, Ga.

"In manufacturing, distribution and other environments, most employees don't have access to e-mail and Web browsers. Networked displays in public spaces [e. g., lobbies, cafeterias, assembly lines and call centers] provide access to company news, policies and operational statistics," says John Moezzi, business development manager for Webpavement. "Employee-communication displays are a natural outgrowth of the intranets that many companies have implemented."

Major hotel chains are getting into the act, too. "The Hilton and Marriott [for example] are installing flat panels because customers have them at home and want the same experience on the road," says Ron Snaidauf, vice president of the commercial products division of LG Electronics USA, which has a team of sales and technical support staff dedicated to resellers of large commercial displays. "Most of these displays are 32 inches due to space constraints. LCDs are preferred for two reasons: They can double as computer monitors for laptop-carrying business travelers, and hotel operators can use them to display static ads as well as video."

In addition, travel hubs, including trains, subways, bus stations and airports, are replacing CRTs with energy- and space-saving flat-panels. "Virtually every new passenger-information system is specifying LCDs," Samsung's Pickard says. The growth of advertising- and entertainment-display networks in transportation facilities will help push big-screen sales from $347 million in 2004 to $911 million in 2010.

The Killer App

Of all the applications for these large displays, advertising signage represents the biggest value proposition for large-display vendors and VARs to sell to clients. To wit, iSuppli predicts that digital signage will account for more than $1 billion of LCD sales in five years, up from $107 million in 2004, while plasma sales will grow from $416 million to $608 million.

"There are many growing verticals within the digital-signage market," says Sanju Katri, senior analyst for large displays with iSuppli. "Installations at retail locations, malls, hotels, restaurants including QSRs [quick service restaurants], banking and movie theatres will provide new opportunities for VARs and systems integrators."

Digital signage gives marketers better control over their advertising messages. From a central office, ads targeted to the demographics of specific stores can be delivered over any IP network. Ads can be changed instantly to offer coffee and doughnuts in the morning, or video games to the after-school crowd. The eye-catching impact of the displays makes them very effective marketing tools.

Outdoor recreation retailer Bass Pro Shops knows this firsthand. Beginning two years ago, Direct Link Marketing (DLM) of West Palm Beach, Fla., installed seven NEC 42-inch plasma displays in each of 19 Bass Pro stores. DLM charges suppliers to run ads on the screens. DLM manages the production, scheduling and delivery of ads over Bass Pro's IP network. Sales of products advertised digitally have exceeded traditional promotions by up to 400 percent. Also, Bass Pro sold an extra million dollars' worth of its house-brand socks using only digital promotion.

"Retail signage is a fun, exciting category that's growing exponentially," says Ron Scirotto, director of sales and marketing for DLM. He says revenue is growing at 200 percent to 250 percent per year, and the firm has an ever-growing pipeline of projects. It took DLM two years, however, to prove the medium's effectiveness in incremental rollouts at Bass Pro, Scirotto says. DLM leases equipment to stores, reducing the cost of entry. The money is in long-term maintenance and advertising revenues. Educating retailers takes time, too.

"You have to get everyone committed--even the merchandisers who are used to buying, not selling or advertising to suppliers, Scirotto says.

But early adopters have established digital signage's revenue-enhancing and cost-savings value. Now major chains, including Safeway, Foot Locker athletic shoe stores and McDonald's, are joining the party. "When national advertisers start writing checks for nationwide rollouts, we'll start to see very large revenues," Pickard says.

Point-of-purchase electronics is proving its mettle, agrees Lyle Bunn, director of digital signage for BTV+ in Mississauga, Ontario. BTV+ specializes in content management and delivery over a satellite network that covers North America. It serves 13,000 clients in distance learning, multilocation presentation and digital-signage markets. Last quarter, BTV+ landed contracts covering 6,000 digital-signage displays in retail, lodging and other locations, Bunn says. Founded in 1981, BTV+ is one of the established partners VARs need in the digital-signage world.

"It's a very confusing universe of content providers right now," LG's Snaidauf says. "I've seen content providers come and go. VARs need to look carefully for capable partners."

David Hakala ([email protected]) is a freelance writer based in Denver.

Vendor Directory

AOC International

Fremont, Calif.

www.nam.aocdisplay.com

(888) 662-9888

BenQ

Irvine, Calif.

www.benq.us

(949) 255-9900

Clarity Visual Systems

Wilsonville, Ore.